Moody's: Outlook for higher ed sector now negative

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Associated Press

Posted on January 16, 2013 at 11:05 AM

Updated Wednesday, Jan 16 at 11:07 AM

Ratings agency Moody's is turning sour on the higher education sector, saying even prestigious, top-tier research universities are under threat from declining enrollments, government spending cuts and growing public doubts about the value of a college degree.

Moody's says today it's revising its outlook down to negative for the entire sector. Previously, it had a stable outlook for market-leading research universities, but negative for the rest of higher education.

The agency says colleges and universities still offer a valuable product, but must take bolder action to cut costs. With family incomes stagnant, many are struggling with enrollment and revenue. Moody's also says any upcoming budget deficit deal in Washington will likely hurt colleges.

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